More insurers pressured to lower MNsure rates: Time to remove politics from rate-setting process

Center for the American Experiment ^ | 10-24-14 | Peter J Nelson

[TurboZamboni]

The Star Tribune reported yesterday that the Minnesota Department of Commerce “asked” PreferredOne to lower insurance rates in the MNsure exchange last year. The July 2013 letter referenced in the story reveals the company lowered rates twice in response to Commerce “objections.”

PreferredOne ultimately agreed to lower rates by 37 percent from its initial proposal, which resulted in the company offering the lowest rates in the nation. Governor Dayton’s administration celebrated these low rates throughout the year, all of which helped dial down the political heat from MNsure’s botched rollout.

“Now,” according to the Star Tribune, “those subscribers face an average premium increase of 63 percent if they stay with PreferredOne.”

This revelation comes after Governor Dayton insisted in a debate that PreferredOne “misjudged the market” and refused to take any responsibility for the yo-yoing rates now harming tens of thousands of Minnesotans.

Governor Dayton is responsible for knowing about Commerce’s involvement and, if he knew, he intentionally misled the debate audience.

UCare also lowered rates in response to objections from Commerce

This may be just the beginning of the story. PreferredOne was not the only company pressured to lower rates.

Rate filing documents show Commerce “objections” successfully pressured UCare to lower their rates too. An August 2013 letter from UCare’s chief financial officer explains the company lowered rates at least twice “in response to the Commerce Department’s commentary.” Analysis of UCare spreadsheets filed with Commerce, suggest average premium rates were reduced by 26.6 percent from initial proposals.

This reduction did not result in a similarly dire financial outcome for UCare because the company’s rates started out much higher. Even after the reduction they were still priced higher than much of the market and, as a result, UCare has only enrolled 549 people.

[Chode]

i know... raise TAXES!!!

[Son House]

The 37% lower rates must have finally cut into the companies ability to be financially viable.

Democrats may realize their holding down rates till after the election is going to make their term unbearable when hearing from their constituents.

[The Great RJ]

My bet is that Preferred One will simply pull out of MN Sure leaving the taxpayers of Minnesota holding the bag. Obamacare is a total train wreck, but unfortunately it will destroy all private health insurance and ruin the US healthcare system before it gets repealed. I expect in 5 years we will have a single payer system with plenty of GOP cooperation in implementing it. Of course it will be a two tier system with red carpet treatment at the best facilities for members of Congress and government officials and UK style wait in line for crappy care system for the rest of us peons.